INDUSTRIAL ACTION

Numsa and United front picket at Eskom HO

The National Union of Metalworkers of SA (Numsa) and the United Front picketed outside Eskom’s headquarters at Megawatt Park on Thursday and handed over a memorandum of demands focusing on Eskom’s request for a 19.9% tariff increase and labour brokering, amongst other matters.  The union says corruption on the part of Eskom’s management and board, as well as what it calls “the apartheid wage gap” in the power utility’s workplace, are some of its major concerns.

REMUNERATION AND EMPLOYEE BENEFITS

SARS takes R3m executive bonus dispute to court

The SA Revenue Service (SARS) is seeking a declaratory order from the North Gauteng High Court on whether bonuses of R3m awarded to members of the executive committee (Exco) in August 2016 should be regarded as irregular expenditure or not.  This was indicated in a report submitted by SARS Commissioner Tom Moyane to Parliament’s standing committee on finance.  According to the report, no bonus payment was made to the commissioner during the period covered.  The Auditor General queried the authorisation of the payment of the bonuses to the Exco members and as an interim measure it was agreed that it would be reported under irregular expenditure in SARS’ financial report.  SARS now wants the court to decide on the powers given to the SARS commissioner in terms of the SARS Act to authorise such payment of bonuses.  The DA’s Alf Lees asked Moyane why the court has been approached to make a ruling on the legality of the payment of the bonuses instead of approaching the minister of finance at the time for permission to make such payments.  In Moyane’s view, the court would be the best suited to solve the matter.

Remgro’s Johann Rupert wants investors to advise on executive remuneration

Johann Rupert, chairman of Remgro, has called on shareholders to help find an appropriate structure for remunerating executives.  At Remgro’s AGM on Wednesday some resistance was shown in the nonbinding advisory vote on the remuneration policy, with almost 19% of shareholders against the resolution.  The votes against were closer to 40% if the Rupert family vote was stripped out.  Rupert said he believed the votes against stemmed from Remgro not having clear key performance indicators (KPIs).  “I’d like to ask these investors to advise us how they would like us to set up these KPIs.  It’s difficult when you’re a diversified investment holding company to apportion blame or reward.”  Rupert also said he had empathy with investors on the remuneration issue.  “Help us set up a better system.  It will help if we can work together to find a better solution for all.”  But he also pointed out that asset managers who had voted against the resolution operated on cost structures that were markedly higher than those incurred by Remgro.

Private member’s bill on paternity leave passed in Parliament

History was made in Parliament on Tuesday when a private member’s bill was passed for the first time in the National Assembly.  The Labour Laws Amendment Bill, proposed by ACDP MP Cheryllyn Dudley, aims to give fathers the opportunity to take paternity leave.  Fathers would get 10 days’ of parental leave on the birth of a child when the bill is enacted.  The bill also provides for 10 weeks of adoption leave for one parent when adopting a child under two years; increases in unemployment insurance benefits from 238 to 365 days; and increases in maternity benefits to 66%.  Public servants have also been included under the Unemployment Insurance Fund.  The Bill could come into effect by June next year.

Empowerment scorecard for retirement funds left out of Financial Sector Code

The final version of the Financial Sector Code has been gazetted with a crucial omission, namely a mandatory scorecard for retirement funds that would have seen more black principal officers and trustees appointed.  During negotiations, a mandatory scorecard emerged where retirement funds could earn up to eight points for appointing black principal officers, executives and senior management and a further eight points for black trustees with voting rights.  A total of 80 points could be earned for procuring services from black-owned asset consultants, actuaries, employee benefit providers and asset managers.  This scorecard has disappeared from the final code and has been replaced by a voluntary dispensation.  The scorecard was withdrawn during negotiations due to concerns regarding the cost of compliance for funds, Financial Sector Charter (FSC) Council CEO Isaac Ramputa said.  But the Association of Black Securities and Investment Professionals (Absip) strongly disagreed with suggestions that the scorecard would have cost retirement funds.

Compensation Fund gets its act together

Attempts to fix the bottleneck of claims to the Department of Labour’s Compensation Fund are showing results.  The Fund pays compensation and medical bills for workers who were injured or contracted diseases due to their work.  An exception is lung diseases due to dust in mines‚ which are handled by the Department of Health.  For many years the Fund and the Compensation Commissioner’s Office that have been the subject of complaints from many quarters, including trade unions and employers.  Settlements of medical claims rose from R2.195bn for 2013-14 to R2.982bn for 2016-17.  Pension payouts to workers with permanent disabilities and their dependants more than doubled in the same period.  Backlogs in compensation and pension payouts on documented claims are now being eliminated.  Progress is also being made chasing up missing documents which are holding up settlement of other unsettled claims.

PSA threatens court action to secure better labour representation on PIC board

Finance Minister Malusi Gigaba might face court action from the Public Servants Association (PSA) if he does not agree to the unions’ demands to have better representation on the board of the Public Investment Corporation (PIC).  PSA’s spokesperson Tahir Maepa indicated that three letters of demand have been written to the minister in this regard without response.  In those letters, the PSA raised concerns over the composition of the PIC board, which it said contravened the PIC Act of 2004.  The PIC acts as the primary investment agent for the Government Employees Pension Fund (GEPF) and other state funds.  The majority (207,000) of the PSA’s members are GEPF members.  The PIC board is appointed by the finance minister, but in terms of the Act he should have due regard for nominations submitted by depositors.  “All we are saying is from where we are sitting, the board is wrongfully constituted.  It does not comply with the Act,” said Maepa.  Currently there are three vacancies on the board.  The PSA wants the minister to amend the memorandum of incorporation to include GEPF representation on the board and for the vacancies to be filled by labour representatives.

EMPLOYMENT AND LABOUR ECONOMIC MATTERS

Lonmin to cut social and labour projects

Platinum producer Lonmin plans to cut spending on social and labour projects and freeze “non-critical recruitment”, as part of an array of actions to save cash.  This was disclosed in an unpublished presentation to stakeholders earlier this month in which the company signalled it would stop all discretionary spending and save R250m via energy and water initiatives.  It also reiterated plans to cut capital spending.  Cutting expenditure on social and labour plans (SLPs) could be problematic as mining companies are required to meet certain obligations to provide housing and other services to the communities around their shafts to maintain their operating licences.  In September, Lonmin said it had been informed by the Department of Mineral Resources (DMR) that it had failed to meet some social and labour obligations, although it added that it did not think its operating licence was in jeopardy.  Lonmin spent R270.8m on SLPs during the 2016 financial year, the last year for which it provided full details.  Lonmin spokesperson Wendy Tlou said they were engaging with the DMR on the proposed adjustments to the plans.  She also said “non-critical recruitment” involved “positions we can delay or do without for some time compared to critical roles you may need immediately for operational reasons”.

In the meantime the DMR confirmed that it was studying the contents of a letter sent by Mining Forum SA, which alleged that Lonmin was in breach of its social and labour plan (SLP).  Only thereafter would it decide on the “appropriate course of action”, the department indicated.  Mining Minister Mosebenzi Zwane’s spokesperson Fidel Hadebe said claims of non-compliance still needed to be verified and “there are just too many allegations levelled against the company”.  Mining Forum SA, a non-profit organisation representing mining communities, wrote to Zwane on 25 November asking him to suspend Lonmin’s mining licence due to SLP non-compliance and the continuing violence in the Marikana community in North West.

Junior doctors  may face 2018 internship crisis

KwaZulu-Natal (KZN) is among the three provinces which have not filled all their allocated medical intern posts for 2018, driving anxious final year students to campaign on social media.  Michael Van Niekerk of the Junior Doctors Association of SA (Judasa) said the campaign was to raise awareness of the possibility of unemployed doctors if the applicants were not allocated in time to take up posts on 1 January.  Judasa falls under the SA Medical Association (Sama), whose chairman, Dr Mzukisi Grootboom, said 280 final year medical students could be affected.  He claimed that the number of student doctors eligible for internships in 2018 now exceeded the available pool of funded posts in the country.  But, health minister Aaron Motsoaledi said there were more than enough posts and it was the provinces that were not releasing the funds to fill them.  Fearing that a “crisis” was looming, Sama and Judasa made a call on premiers David Makhura (Gauteng, Helen Zille (Western Cape) and Willies Mchunu (KZN) “to urgently instruct their provincial fiscus to allow for the funding of more medical intern posts to cover the shortfall.”

Highveld Steel recoups jobs

Nearly 700 of the 1,800 jobs lost when the entire workforce of Evraz Highveld Steel and Vanadium was retrenched in February 2016 have been recouped.  This has been achieved through the resuscitation of part of the steel business, which is currently in business rescue.  Business rescue practitioner Piers Marsden indicated on Wednesday that they had signed a contract manufacturing agreement for one particular part of the business, which had enabled them to take it from “zero jobs to about 700” in the past 18 months.  But it had not been possible to resuscitate the business as a fully integrated steel and iron manufacturer, even though components had been resuscitated.  Marsden added that they had constant engagements with various players in government and various governmental organisations in an attempt “to preserve those 700 very hard fought jobs”.    Marsden pointed out that there was an obligation in terms of the severance agreement signed with the two unions and non-unionised staff at Highveld to offer jobs that became available to the previous employees and a large majority of the 700 jobs would have been made available to the previous employees.  While the full severance liability from February last year has still not been settled, some R100m of about R330m has been paid out.

Taxi drivers’ health

The departments of health and transport signed a pledge with the SA National Taxi Council (Santaco) to encourage taxi drivers to prioritise their own health and that of their passengers.  This formed part of the launch of the PHILA Taxi Industry Campaign, a first-ever health promotion campaign, targeted at the taxi industry to strengthen and intensify delivery of health and wellness services in the industry.  Addressing scores of taxi drivers at Bosman taxi rank in Tshwane, Health Minister Aaron Motsoaledi called on taxi drivers to change unhealthy lifestyles and prioritise their health.  He called on citizens to think twice about compromising their health and encouraged taxi drivers to regularly go for check-ups and get tested.  The Minister added that government was looking into bringing clinics closer to taxi ranks to enable drivers to get services.  His colleague, Transport Minister Joe Maswanganyi, also emphasised the importance of taking health seriously.  The launch also served as an official collaboration between the PHILA campaign and Santaco’s Operation Hlokomela in an effort to promote and contribute towards responsible behaviour as part of the 2017 World AIDS Day focus.

DTI warns in new report that large-scale job creation not as simple as it seems

In an article on the ‘State of Manufacturing 2017’report, Engineering News revealed that the structure of the SA economy does not allow for the creation of large numbers of jobs, nor can it support a large number of new jobs at appropriate skills levels.  The report, which was released by the Department of Trade and Industry (DTI), found that one of the major reasons for the inability to create a large number of jobs or skilled professionals lay in the composition of the domestic economy, which, given development challenges, was not appropriately composed in terms of the primary, secondary and tertiary sectors.  It also found that labour intensive sectors, in particular, were not growing fast enough to support the creation of a large number of jobs.  A major impediment to creating a large number of jobs in a short time frame was the impact of apartheid-era spatial planning, which the DTI noted was continuing to constrain the domestic economy with detrimental factors.  These included extended travel time and costs, and an inability for companies to run multiple shifts.  In response to the Manufacturing Circle’s ‘Map to a Million New Jobs in a Decade’ report, launched last week, DTI Minister Dr Rob Davies on Tuesday said one-million new jobs seemed like “a big ask”.

Nersa’s approval to Eskom on pricing package for Silicon Smelter plants will save jobs

The National Energy Regulator of SA (Nersa) has approved Eskom’s application for a two-year incentive pricing package for Silicon Smelter’s plants in Polokwane and eMalahleni.  Eskom made its case for a negotiated pricing agreement to Nersa earlier this year after Silicon Smelters, which is owned by global silicon metal and silicon-based alloys producer Ferroglobe, asked the power utility to supply electricity at an “appropriate” price for the company to reconsider its decision to cease silicon production at its two sites.  Nersa last week confirmed that the regulator had approved the application in August and said it would release the reasons for its decision in due course.  The approval of the incentive pricing package should entice the group to include production from South Africa in a revised global production plan.  The pricing agreement was moreover meant to save 3,600 jobs that would be lost if the company ceased operations.  Nersa’s consultation paper on Eskom’s application indicated that silicon metal producers around the world were facing difficult conditions as silicon prices were at their lowest levels.

LEGAL

EU court rules contract workers entitled to paid annual leave

In an interesting European Union court case which could have future implications for South Africa, the EU’s highest court ruled last Wednesday that employers must provide paid annual leave for employees in a case that could impact workers in the so-called “gig” economy (which includes short-term and freelance contracts rather than permanent jobs).  The case involved a salesman for The Sash Window Workshop in Britain employed from 1999 until 2012 on a self-employed, commission-only contract with unpaid annual leave.  The salesman took the company to court seeking payment for leave, taken and not paid for, as well as for days not taken.  A British court ruled that he was a “worker” under EU law, but UK judges asked the European Court of Justice whether the company was obliged to pay him for the leave he had not actually taken.  The EU court said it was a fundamental right for workers to be able to rest and that such a right would not be guaranteed if the salesman was forced to take unpaid leave and only then be able to bring action to claim payment.

City of Joburg employee arrested in connection with R28m revenue refunds scam

A City of Johannesburg operational manager at the refunds unit of the revenue department was arrested on Wednesday by the Hawks in connection with a R28m revenue refunds scam.  It is alleged that the employee defrauded the City of about R900,000‚ which was paid in two transactions to a certain company and then into his account.  Joburg mayor Herman Mashaba said three people handed themselves over to the Hawks on Wednesday in connection with the same case.  The suspects will appear in the Johannesburg Commercial Crimes Court on Thursday on charges of theft‚ fraud and corruption.  The four arrested suspects join 14 suspects who were arrested in August in connection with fraudulent refunds.  Thirteen of the 18 suspects are City officials.  The investigation by the Hawks has revealed that the suspects in the case defrauded the City of R28m by claiming fraudulent refunds purported to be on behalf of property owners.  In some instances the property owners colluded with the officials to inflate refunds due to them.

Tension rises over Mineral Resources’ relocation of managers out of ‘Gupta’ areas

The rift between the Department of Mineral Resources (DMR) and three disgruntled regional managers, whom it wanted to shift to other provinces, has deepened.  The DMR has been accused of double dealing in handling the dispute.  One of the concerns raised by people in the department was that the forced relocations were designed to put more pliable regional managers in place in Mpumalanga and KwaZulu-Natal (KZN), where the controversial Gupta family owns or indirectly owns various coal mines.  According to the latest papers filed in the Labour Court, the DMR has filed an application for a ruling that the three managers from KZN, Mpumalanga and Limpopo opposing their relocation had breached a rule by failing to deliver an amended or varied affidavit within a prescribed time frame.  But the applicants have argued that the DMR’s application was an attempt to avoid dealing with the merits of the application.  The filing delay was apparently because of an attack on Aaron Kharivhe, Limpopo’s regional manager, as well as his own multiple suspensions from his job in Mpumalanga.  Kharivhe had to be hospitalised with serious head wounds.

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